What does "Crypto Native" mean?
Social thoughts and impacts related to the emergence of blockchain technology
The term ‘crypto native’ is commonly used jargon in the blockchain communities. Crypto native has two definitions:
1) Referring to an individual or team: Crypto natives are people involved with cryptocurrency projects with no prior professional finance experience. They didn’t go to HBS, didn’t intern at a hedge fund in the summer, get a job as an associate at Goldman Sachs, and probably never took a selfie in front of the golden bull on Wall Street. It’s also very likely they never owned a home or had a mortgage, weren’t able to open a credit card, had to take on a lot of debt for student loans or skipped out on a 4-year college education due to the exorbitant cost (and antiquated education). These crypto natives learned about finance and code from the Internet by watching YouTube videos, reading blogs, and interacting with knowledgable and generous individuals online.
2) A novel idea that was generated within the blockchain community. These can be wide ranging; an innovation on a traditional financial product, a new business model, or process.
This article will review some examples of crypto natives that are unique, and more closely align the incentives and values across crypto projects, users, investors, and development teams.
DAO - A Decentralized Autonomous Organization (DAO) is a crypto native concept, made famous by the original Ethereum DAO. DAO’s are becoming incredibly popular with emergent DeFi protocols, including the largest and most widely used like Compound, Synthetix, and Aave. These projects are allowing token holders a voice in the direction of the protocol, which includes everything from fees to strategic investments using the project’s treasury. On the legal front, DAOs have gained legitimacy through Wyoming’s recent bill passage. This should set a precedent for DAO growth and acceptance in other jurisdictions.
Governance - Closely related to DAOs, anyone with an Internet connection has the power to actively bring ideas to life. Blockchain and DeFi has opened up protocol governance to a diverse set of users and participants. Geography, race, gender, age, and net worth are irrelevant when it comes to good governance, rather the quality of the ideas, research, and writing are what matter. Public forums, chat rooms, and Twitter are open to anyone to interact, share ideas, and formalize proposals. These are ultimately voted on and incorporated into the crypto projects’ code.
Good governance in traditional companies always includes excellent leadership, something the best teams in crypto acknowledge as a requirement. Crypto leadership manifests through high quality writing, communication, collaboration with other protocols, and being user-centric.
Accessibility - Related to good leadership and inclusivity, I’ve never worked for or with companies that are as attentive and available to customers and investors than in crypto and DeFi. Communications channels are open and teams are responsive any time of day thanks to community managers positioned around the globe. This is a mutually beneficial strategy for development teams and investors/users because it ensures projects are building the right features. Oftentimes, alpha and beta tests can be run in as short as a day or week, which provides extremely fast hypothesis testing and can allow teams to iterate or pivot quickly.
Fair launch - This crypto native idea was made famous by yEarn during DeFi summer when every one of the 30,000 YFI tokens was given away through liquidity mining. Protocols have been giving away “valueless governance tokens” to participants through various mechanisms as a way to distribute ownership, and avoid having their tokens classified as a security. This concept helps distribute wealth and ownership across DeFi participants.
Incentives - DeFi has been infinitely more successful due to the generous incentives provided to early adopters, loyal users, and risk takers. The aforementioned governance token distribution has opened the new money flood gates into Ethereum’s DeFi ecosystem, and total value locked recently crossed $60b. More novel ideas are emerging that reward loyal users. Curve offers boosted returns with token lock ups, KeeperDAO offers tokens for trading, and StakeDAO offers points that can be redeemed for unique tokens. These incentives encourage loyalty, new users, and continued growth for DeFi protocols.
Youth - I am routinely reminded about how much of a dinosaur I am in crypto. Entire projects are being developed and maintained by teenagers now. Crypto culture incorporates elements of social media, Anime, and Internet slang, which the Boomers (I should include myself) just don’t grok. In crypto, age ain’t nothin’ but a number, and the content is what’s important. People have been hired by major DeFi investment funds after posting interesting Twitter threads.
Job interviews routinely include an applicant’s Degen Score, their favorite DeFi investment thesis, and Discord/Twitter handles instead of college transcripts.
Hierarchy - I’ve heard companies are trending towards ‘flat organizations,’ but nowhere is this more obvious than in DeFi. Thanks to smart contracts and blockchain technology, investors and users can trust a globally distributed team of developers, oftentimes anonymous, who have never met each other in real life. Crypto native builders create useful products thanks to well aligned tokenomics and incentives. Crypto is an entirely opt-in economy that people fall in love with and never leave. Most builders have never worked so hard while loving what they do.
Crypto natives and the DeFi communities have disrupted the traditional organization structure and financial constructs we grew up with. It’s an evolving ecosystem and social experiment that is fun as hell to be a part of, and is full of lucrative opportunities. It has stripped away the walled gardens of finance and education through the proliferation of open source protocols and code bases available to anyone with an Internet connection. This very progressive movement and has shaken up a tiny fraction of the employment and financial industries, and has the potential to change the world as we know it. Technology and the COVID-19 pandemic only accelerated the shift to a more global and decentralized economy.
So what do these things all mean and how will they play out? I have some predictions:
1) Jobs, jobs, jobs! Protocol governors, fulltime software engineers, and community managers will be elected by DeFi stakeholders to manage and build projects. This is already happening and communities are blossoming in DeFi.
2) Resumes will be generated from on-chain wallet history. The protocols one participated in, whether they meaningfully contributed to the projects, or even as a means to identify bad actors.
3) Anonymity and pseudoanonymity will become acceptable. In a world where it’s difficult to escape judgement, the work products should speak louder than anything. Names and faces will be unimportant, while blockchain wallet addresses will mean everything.
4) DAOs will be incorporated into more progressive non-blockchain companies.
5) Advanced education and degrees will shift from in classroom, liberal arts to self-directed and on the job training. The ability to contribute to crypto projects without a formal education is both a cost and time savings, and enables anyone to earn income immediately. This turns the system we grew up in completely upside down.